Uber’s Free Ride

“It sucks getting around here,” Max Crowley said, in a rare moment of real emphasis. Crowley is a community manager at the car-service start-up company Uber, and “here” is Austin, Texas. More importantly, here is downtown Austin in the middle of South by Southwest Interactive, perhaps the most influential technology event of the year, swollen and festering with thirty thousand registered attendees. But Austin, which lacks a serious public-transit infrastructure, does not have thirty thousand or even a thousand cabs to move them around. It has two hundred and seventy. So Uber is offering everyone in the city of Austin free rides for the week in the vehicles of strangers.

My first Uber ride was in a slightly dingy silver minivan driven by a cheerful mom in her late forties or early fifties with the tinge of a homey Texas accent. She had once worked as a bartender at the topless bar across the street from my destination, Hotel San Jose. She was a fine driver, and the experience was completely smooth aside from the traffic. But it was not quite what I had expected from Uber—and if you know anything about it, not what you’d expect either. However, the point of Uber, now and in the future, according to Crowley, is to be “everyone’s private driver.” He added, “It doesn’t matter if you want to take a ride with a mom in her van, because that’s cheaper, or take a taxi or a black car.”

Uber is the best-known and most exciting vehicle start-up since Zipcar—it counts Jeff Bezos and Goldman Sachs among its many investors. When it launched in 2010, it allowed riders to request pickups by livery-service black cars with the swipe of an iPhone app; it has been particularly lauded by the technology community in San Francisco, where waiting for a taxi can feel like waiting for an eclipse. (There is something enthralling about tracking your ride as it slides along the map toward the pulsing dot that represents you, like a suicidal pebble waiting to be gobbled up by Pac-Man, no matter what city you are in.) Its surge-pricing model, under which prices can double during periods of high demand, has received its fair share of infamy as well, largely for poor timing. But Uber is nearly as well known for scrapping with city governments as it seeks to expand its services beyond black cars and into major metropolitan markets across the country: the company has been sued in San Francisco, Chicago, and Boston, and partly chased out of New York City; it recently won a political battle in Washington, D.C., to continue operating there.

The free service it was offering in Austin during SXSWi, dubbed UberX, is what’s known as ride-sharing: normal, everyday drivers—who lack standard taxi or livery-service permits—ferry riders to their destinations using their own vehicles and gas. Uber also offered its Uber Lux livery service as an alternative, but with a seventy-five-dollar minimum. Uber has come to SXSW three times; it is looking to eventually establish a permanent foothold in the city. “With local regulations, we can’t launch here legally,” said Crowley, who had come down to Austin with twenty other Uber staffers to run the pop-up service. His hair is smoothly slicked back, a sharp contrast to the earthy sandals on his feet, and his retinas are so intensely colored that he never quite seems to blink. Uber can’t make money off the ride-sharing service, according to Crowley: “The city said, ‘If you do it, we’ll arrest everybody.’ So we can’t charge for it.” (A competitor, Sidecar, had just sued the city of Austin after receiving a cease-and-desist letter.)

Uber hired roughly fifty drivers for the week, according to Crowley. (Spread them out over thousands of “activations” and it’s clear why a successful request for a driver sometimes took twenty attempts.) Over eight or so rides, I learned that the training for Austin UberX drivers, who were recruited through a Craigslist ad, consisted of a forty-five-minute orientation following a background check, though “twenty minutes of it was just filling out forms,” one driver told me. Another driver admitted, as she nearly ran into a group of people in a crosswalk, that she had only attended “like five minutes” of the training. Most of the orientation was about how to use the Uber system and “what not to do,” according to one driver—the biggest thing not to do was accept gratuity, since it would jeopardize the legality of the enterprise. (One driver, though, happily told me that she would accept a tip.) No one would tell me how much they were making, conceding only that they were paid an hourly rate. One offered that it was “decent.” Almost every driver had a day job—a writer, a karate instructor, a Time Warner marketer—and nearly everyone said they would consider driving for Uber after SXSW was over. Multiple drivers said there was no instruction from Uber about what to do if they were involved in an accident, and they were generally hazy about how liability would work. I rated every driver five stars.

The promotional cost to Uber is non-trivial, even for SXSW, which is an acid-drenched Candyland of ludicrous and expensive marketing campaigns. By March 11th, four days into the festival, Uber had given out “thousands” of rides, according to Crowley: “We look at it as an acquisition cost.” But offering UberX for free is more than a pricey marketing maneuver. Besides stoking demand for the service in Austin, perhaps in an effort to induce a change in city regulations, it’s a test. “This year, one of the big pushes, other than just expansion, is going to be more of this mid-level transportation,” Crowley said, referring to UberX. The company wants to be everywhere, eventually. A launch in the suburbs of Chicago later this year will be Uber’s first move outside of a major urban market. And the company is well aware that not everyone “can drop twenty-five dollars to get home from a random night out with your buddies,” Crowley said. Many of Uber’s future users, in other words, will be shuttled around in blue Hondas and beige vans, not black cars.

But Uber will still need to cut through a lot of red tape to get there, city by city. Crowley’s calm demeanor never totally cracks, but his agitation shows when he talks about “shitty laws” hampering Uber’s progress. “We’re complying with all the regulations of the city, as far as the drivers having to become a livery driver,” he said. As Uber sees it, it’s just helping cab companies and car services manage underutilized resources. Comparing Uber to OpenTable, the online restaurant-reservation system, he asked, rhetorically, “Why would you regulate restaurants’ use of a reservation system?” It’s a more telling comparison than you might realize. When I asked if there’s potential for Uber to move beyond managing and delivering ground-based transportation, Crowley replied, “That’s why we’ve done some of the marketing promotions we’ve done, to start to test what that looks like.” At last year’s SXSW, Uber delivered barbecue to users. For Valentine’s Day, it delivered roses. “We were just kind of dicking around,” Crowley said. But the technology that Uber developed for the barbecue deliveries, which allowed choices within the app, was utilized a month later in Chicago, when it allowed riders to hail yellow cabs as an alternative to black cars. “You start to think about what it’s like to press a button on your phone and get whatever you want, whenever you want it, and we’re really good at moving stuff around the city. Right now it’s cars and people and whatever else…” Crowley trails off. I suspect there are a lot of ways he could end that sentence.

When I landed in New York two days later, there were no cabs at the taxi stand at J.F.K. It was nearly 1 A.M., and it was thirty degrees outside. Coming from Texas, it felt like negative thirty. A group of twentysomethings, also clearly returning from SXSW, mulled over what to do. One of them said he’d just try using Uber. It was apparent that he’d used it for the first time in Austin; it had always been too expensive in New York. Another guy announced, “I just Carmel’d! It’s like Uber but ghetto-er.”

Illustration by Laurent Cilluffo

Matt Buchanan was a science and technology editor for newyorker.com from 2013 to 2014.

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